Amazon to face FTC lawsuit, report says

The US Federal Trade Commission (FTC) is preparing to file an antitrust lawsuit against Amazon that will target the e-tailer’s core online business.

The lawsuit is expected to claim the Seattle-based company has improperly used its power to reward online merchants which use its logistics services while penalizing those that do not, Bloomberg reported.

Third-party merchants pay commissions to Amazon on each sale as well as for the services —warehousing, shipping and advertising—it provides. Although the fees are optional, the FTC alleges Amazon’s algorithm places merchants that do not pay the fee at a competitive disadvantage.

FTC Chair Lina Khan has been preparing the complaint for several months and finalizing details, according to Reuters. However, the antitrust case has been looming for much longer as Bloomberg—citing documents— reported Amazon received notice of the initial investigation in 2019.

The documents allegedly included questions about how using Amazon’s warehousing and delivery services impacted third-party sellers’ product placements on its online marketplace—for example, the boxes on the website which make some products more prominent.

The court papers are expected to be filed before the FTC undergoes personnel changes in August. While it is possible a settlement will be reached before the charges are formally filed, the FTC Chair is reportedly seeking a restructuring of Amazon’s business model. This result would likely prompt appeals from the e-tailer.

The potential suit is one in a string of actions taken against Amazon by the FTC and EU lawmakers over the past year. One legal battle ended in December when the European Commission accepted an agreement from Amazon stating it would change its business practices in Europe. Its commitments included no longer using third-party seller data to inform its own retail decisions. Also, it agreed to grant sellers equal access to its Buy Box and Prime program.

More recently, the FTC filed a complaint over the way the e-tailer enrolls customers onto its Prime

Shachihata names CEO

program. The suit claimed Amazon “knowingly duped” millions of customers into subscribing to Amazon Prime and the “primary purpose of its cancellation process was not to enable subscribers to cancel, but to stop them.” Amazon denied the allegations and called the FTC’s claims “false on the facts and the law.”

In addition, the federal agency has been investigating Amazon’s $1.7 billion deal for Roomba vacuum maker iRobot as well as the 2018 deal with Apple to sell iPhones, iPads and other devices on Amazon’s marketplace.

Amazon has demanded Khan withdraw from antitrust investigations into its business given her past criticisms of the company—she wrote a scholarly paper on Amazon’s market dominance while a Yale Law School student—but the FTC Chair has so far declined to do so.

Amazon and the FTC have not yet commented on the press reports.

Shachihata USA has appointed Masaaki Okuno as its new president and CEO. Okuno has been at the writing instruments and stamps manufacturer for more than two decades. He was most recently an executive officer at its global business division. Martin Clemente, the long-serving national sales manager at Shachihata USA, commented: “Masa has been a friend and mentor for over 25 years. I know he has the leadership capabilities and knowledge to help us grow and meet our aggressive goals.”